The interest rate for the first three years of an $87,000 mortgage is 7.4% compounded semiannually. Monthly payments are based on a 20-year amortization. If a $4000 prepayment is made at the end of the 16th month:
a) How much will the amortization period be shortened?
b) What will be the principal balance at the end of the three-year term?

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The Answer of The interest rate for the first three years of an $87,000 mortgage is 7.4% compounded semiannually. Monthly payments are based on a 20-year amortization. If a $4000 prepayment is made at the end of the 16th month:
a) How much will the amortization period be shortened?
b) What will be the principal balance at the end of the three-year term?

The Interest Rate for the First Three Years of an $87,000